Peter Lilley’s 'little list’ has hung over the party for too long – and IDS
can heal the wounds

Just over 20 years ago, when Peter Lilley was running social security, he made a speech that would define the Conservatives’ approach to welfare for a generation. “We are not in the business of subsidising scroungers,” he told a delighted Tory conference. “And just like in The Mikado, I’ve got a 'little list’ of benefit offenders.” He then recited his enemies: “Those who make up bogus claims, in half a dozen names… Young ladies who get pregnant just to jump the housing queue… And I haven’t even mentioned all those sponging socialists.” If there were an anthem for the “Nasty Party”, this would be it.

George Osborne didn’t break into verse at the 2012 Tory conference, but he had a strikingly similar message. He asked his audience to imagine the anger of “the shift-worker, leaving home in the dark hours of the early morning, who looks up at the closed blinds of their next-door neighbour, sleeping off a life on benefits”. Aside from the fact that such houses are more likely to have curtains than blinds, it was an effective tactic. The image of the lazy, selfish scrounger was being conjured up again, and a Tory audience was being invited to boo. It sounded like the Nasty Party was making a comeback.

Iain Duncan Smith is too polite to mention the Chancellor by name. But inhis interview with Cristina Odone in the Telegraph, the Work and Pensions Secretary is clear about his concern over the way the debate on welfare is heading. “We didn’t come into government to pick on targets,” he says. “The Tory narrative is that we are here to save lives, not condemn people.” Or, rather, this is what he’d like the Tory narrative to be. But a different message comes from the Conservative adverts contrasting “hard-working families” with “people who won’t work” and asking voters which side they are on. All this raises an awkward question: is IDS still speaking for the party? Or is the social justice agenda being quietly discarded?

As always with Osborne, his rhetoric is based on careful analysis. He has been struck, almost mesmerised, by the popularity of welfare reform – which is why he’s promising more of it. Earlier this month, he claimed another £12 billion of welfare cuts are needed and challenged Labour to disagree. He believes this is a classic “wedge” issue, which will align him with blue-collar workers. Tory polling and focus group research has identified this as a potent issue: the low-paid, they believe, deeply resent welfare dependency and hugely support attempts to crack down on it. It is a chance, according to Osborne, for the Tories to become the new party of labour – by helping workers, and getting tough with non-workers.

The Chancellor also suspects that IDS has gone off on a tangent, and taken his eye off the political ball. Matthew d’Ancona’s book on the Coalition, In It Together, details Osborne’s frustration– how he believes his older colleague has become engaged in a quasi-religious programme of mass redemption and is “more concerned with moral crusades than the imperatives of the fiscal crisis”. When it comes to welfare reform, Osborne is from Mars and IDS is from Venus: their outlook is utterly different. The Chancellor is interested in saving money and winning votes. He suspects his Work and Pensions Secretary has gone rogue, and is carrying out a moral mission.

IDS is guilty as charged. He freely admits that his main aim is to save lives, not money – but this was always the case. The Wisconsin “tough love” welfare reforms, on which his programme was modelled, did not cut the budget by much. Welfare reform, if done properly, is rather expensive: people need to be coached back into work, given help with CVs and even with transport. As Labour found, it’s far easier – politically – to leave the poor alone and keep sending the welfare cheques. But IDS is operating from a different premise: that the party of Wilberforce and Shaftesbury ought not to tolerate poverty, nor banish the poorest to welfare ghettos.

What’s more, he is not alone. Esther McVey, the newish employment minister, has made clear to the Treasury how appalled she is about the enthusiasm with which it talks about welfare cuts. When ministers were given suggested talking points before Osborne’s Autumn Statement, she protested about the divisive language. She warned that you can’t continue cutting working-age welfare indefinitely without causing real hardship in Northern towns – and Conservatives ought not to forget that.

It’s significant that McVey is one of the new intake of Tory MPs. Many of them regard social justice as being integral to their Conservatism – which is, in part, a generational factor. When Lilley recited his ditty, in 1992, it was not yet clear that many on his “little list” had been trapped by his government’s mistakes. As office jobs supplanted factory jobs, ministers thought the unemployed could be shovelled on to incapacity benefit and forgotten. This went on to create a welfare trap so effective that at least four million people stayed on out-of-work benefits throughout the Labour boom years. The newer MPs are now more likely to recognise that the system designed to fight the old poverty is incubating a new poverty.

At its heart, this is a question about the very identity of the Conservative Party. For most of the last decade, it has had shamefully little to say about social justice. Lilley’s “little list” could be heard to echo down the pages of its manifestos. There seemed to be a greater focus on overseas aid than British poverty (which, admittedly, is not a cause anyone wears wristbands for). Not until IDS quit as leader was he struck by the extent of this new poverty, and he set up a think tank to lobby the Tories from outside. This is perhaps why the social justice agenda still looks like something that was bolted on to the party, rather than something that grew from within.

Only David Cameron can remedy this. The Prime Minister has always spoken convincingly on the subject, saying how it has fallen to the modern Conservative Party to eliminate the poverty that Labour was unable to recognise, let alone vanquish. But these speeches come too infrequently. “I need to get back into this,” he says, occasionally, but there are too few around him who nudge him in that direction. As a result, what ought to be a key component of the modern Conservative message risks being lost.

It should be relatively easy to bring the Tory welfare wars to an end. It was Osborne who decided to bring IDS in from the back benches, and Osborne who asked him to reform welfare, so the two men are hardly irreconcilable. It is a question of language, priorities, and what sort of party Cameron wants people to vote for next year. Is it one that takes sadistic pleasure in making life tougher for those on benefits? Or a party that sees them as victims of a broken system, and wants to help them from dependence into independence?

As Conservative modernisers point out, even people who agree with Tory policies tend to question Tory motives. Given that welfare reform will be at least a 10-year mission, there is a case for the whole Government making clear what these motives are. Tories tend to dislike moral missions – but there is a clear need for one here. And, with the economy booming and unemployment falling, there is a reasonable chance that this mission may be accomplished.